GM to shift Russian operation into GM Europe

7:11 PM, October 18, 2013

Detroit Free Press Business Writer

General Motors plans to move its Russian unit into GM Europe, the latest organizational change in the region where the company continues to lose money.

It lost $285 million in Europe in the first six months of this year, less than the $688 million it lost in the first half of 2012.

Russia will be integrated into GM Europe starting Jan. 1. GM Russia has been part of Shanghai-based GM International Operations.

The shift places management of the Opel brand, which is sold in Europe and Russia, under the same roof. It also comes as GM Europe and GM International Operations have undergone leadership changes this year.

GM Russia President Jim Bovenzi will be reassigned to Detroit headquarters as executive director of global localization strategy, giving GM Europe President Karl-Thomas Neumann responsibility for business in the country.

GM hired Neumann this year as president of GM Europe and CEO of Opel. It also recently reassigned GM International Operations President Tim Lee to chairman of GM China and hired Volvo executive Stefan Jacoby as the new leader of the GMIO unit. Lee continues to serve as executive vice president of global manufacturing.

Neumann said one likely benefit would be to increase Opel’s market share in Russia, where GM also sells Chevrolet and Cadillac.

“All forecasts point out that Russia will become the biggest market in Europe in the next years. Opel enjoys a high reputation in Russia,” Neumann said in a statement.

But GM disclosed Thursday that its sales in Russia fell 18.7% in the third quarter from a year earlier.

The company also announced that Andy Dunstan, who was executive director of sales for central and eastern Europe and international operations, will start leading the Russia unit on Nov. 1. He reports to Neumann.